* Cadbury says has had interest from third parties
* Cadbury raises long-term sales and margin targets
* Reiterates rejection of Kraft's hostile bid
* Cadbury shares up 0.6 pct, Kraft up 0.8 pct
(Adds Cadbury comment on Hershey, updates shares)
By David Jones and Victoria Howley
LONDON, Dec 14 UK chocolatier Cadbury CBRY.L
teased shareholders with the prospect of rival bids and promised
bigger dividends and stronger growth as it again knocked back a
hostile 10 billion pound ($16.2 billion) offer from Kraft Foods
Cadbury chairman Roger Carr said Hershey (HSY.N) and Italy's
Ferrero had both indicated they were contemplating bids, adding
serious negotiations would only start if a compelling and
fully-financed offer emerged.
"At the moment nothing like this has been received," he told
reporters on Monday.
The Dairy Milk chocolate maker was issuing its defence
document against Kraft's takeover bid, telling shareholders not
to let the U.S. food group "steal" Cadbury and kicking off a
seven-week fight for independence.
Analysts said Cadbury's case for its value as a standalone
company did not change their view of how much farther Kraft would
need to raise its offer to persuade shareholders.
"This is not enough to squeeze a massively higher offer from
Kraft in our view," James Edwardes Jones at brokers Execution
said. "It is difficult to see why Kraft needs to pay up much more
British and Irish Cadbury confectionery workers are planning
their own defence against the Kraft takeover campaign. The
assistant general secretary of Britain's largest trade union
Unite Len McCluskey is set to launch the "Keep Cadbury
Independent" campaign on Tuesday with local members of Parliament
Stephen McCabe and Lynne Jones from the ruling Labour Party at
Cadbury's historic Bournville home in Birmingham.
They will argue that the Kraft takeover will result in job
losses and pay cuts.
Shares in Cadbury closed up 0.57 percent at 793 pence,
compared to Kraft's hostile bid worth 729 pence. Many analysts
believe Kraft will need to pay 820-850 pence to win Cadbury.
Shares in Kraft were up 0.8 percent at $27.
For a graphic on Cadbury please click on:
NO MONEY ON HERSHEY
A Kraft-Cadbury deal would create the world's biggest
confectionery group overtaking Mars-Wrigley bringing Cadbury's
chocolate and Trident gum together with Kraft's Milka, Toblerone,
Cote D'Or, Terry's and Suchard chocolate brands.
Cadbury investors have looked to a rival bidder to emerge to
challenge Kraft. Hershey, one of its most likely suitors, has yet
to show it is willing to take on the debt required to launch a
credible bid for a company more than twice its size.
"It is not part of our defence to run around looking for a
white knight," said Carr, when asked if Cadbury had held talks
with Ferrero or Hershey. "They have to come forward with fully
financed offers that are deliverable to trigger talks."
Cadbury also dismissed the notion it would pursue Hershey as
part of its defence, saying the company would not choose to pour
money into the U.S. market.
"We've said if we want to expand, we'd favour spending money
in growth markets where there are high returns," Carr said.
Cadbury raised its underlying annual sales growth target to
between 5 and 7 percent from its previous 4 to 6 percent range.
It sees operating margins by 2013 in a range of 16 to 18 percent
after looking for good mid-teens margins by 2011, compared with
11.9 percent in 2008.
Analysts said there were few surprises in Cadbury's defence
with its 2009 outlook unchanged, while saying it could hit higher
margins without further jobs cuts or factory closures and its
higher sales growth would rely on emerging markets.
A source close to Kraft added that there was nothing in the
defence documents that would make the US company change its
"It is not even jam tomorrow. It is jam in four years time,"
the source said, referring to the new targets.
Kraft said it still believed its offer was in the best
interest of shareholders and that a combination of the two
companies would create "significant growth opportunity."
Credit Suisse analyst Alex Molloy said: "Assuming the group
were to achieve these new targets, Cadbury might be worth
something like 675p per share on fundamentals. We still believe
Kraft needs to offer closer to 850p to win the day."
Cadbury also looked to double-digit percentage rises in
dividend payouts from 2010 onward, and a higher rate of
converting operating profits into cash flow from 2010. In 2008
Cadbury's dividend increased 6 percent to 16.4 pence a share.
Cadbury held its 2009 forecasts for a 5 percent rise in
underlying sales growth and a 135 basis point rise in margins.
Kraft has declined to raise its bid from the terms first
disclosed on Sept. 7 with 300p in cash and the rest in new Kraft
shares, determined not to overpay and convinced no rival bidder
Under UK takeover rules, Cadbury shareholders have until Feb.
2 to either accept or reject Kraft's offer.
(Editing by Paul Hoskins, Hans Peters, Sharon Lindores and Carol